The Future Is Today

2007-2017 decade changed auto sales picture

Since the Lehman Bros. collapse in 2008, the U.S. auto landscape has changed dramatically. General Motors emerged from bankruptcy, but the Detroit 3, including Ford, have lost share to smaller manufacturers including Subaru. Photo credit: AUTOMOTIVE NEWS ILLUSTRATION

After a tumultuous decade of desperation and prosperity, the U.S. auto market of 2017 bears only a passing resemblance to the one that preceded the Great Recession.

Sales competition has tightened considerably among brands, surprising new winners have emerged and, of course, light-truck sales have soared among all makes.

Jesse Snyder has reported on and analyzed auto sales and production for Automotive News, Automotive News Europe and ANTV since 2001.

And that’s just part of it.

Since 2007, the U.S. industry has lurched from an appalling low that killed brands and bankrupted automakers to a long climb to record sales heights. Sales in 2017 will be close to the same number as in 2007, but what a difference a decade of disaster-and-resurgence has made in the makeup of the market.

The four best-selling automakers have bled share, while four smaller ones have soaked up most of it.

Who’s the truckiest?

Fiat Chrysler has the highest proportion of light trucks as a percentage of its U.S. sales mix.

The Detroit 3 have cut 17 assembly plants in North America while international brands have added capacity at a breakneck pace.

Looking back, 2007 was the final year of a long plateau of U.S. auto sales — nine straight years of at least 16 million light vehicles starting in 1999. That period of seeming stability was artificially prolonged by the profit-draining pairing of chronic overproduction with frantic rounds of heavy factory incentives to clear excess inventory.

It all crashed on Sept. 15, 2008, when investment bank Lehman Bros. declared bankruptcy and the government opted to let it fail rather than bail it out. The ensuing financial crisis precipitated the Great Recession. Auto sales collapsed as credit dried up. By the fourth quarter, many buyers couldn’t get auto loans or leases, and dealers scrambled to finance floorplans. From 16.2 million sales in 2007, volume bottomed out at 10.4 million in 2009, even after the federal government poured $ 4 billion into a Cash for Clunkers sales push that July and August.

The stimulus marked the beginning of the longest sales recovery since the 1920s. But the path has been eventful. Beyond the energy crisis, bankruptcies, dead brands, record sales, peak sales, a technology boom, supply pinches from tsunamis and earthquakes, intensified government regulations, challenging safety and fuel economy mandates and massive recalls, there has been a huge swing in consumer tastes toward sit-high vehicles and away from cars, which were the industry mainstay for a century. Finally, add some new competitors to threaten the status quo on product offerings and retailing.

Changing fortunes

Shifts in automakers’ U.S. market share between 2007 and the first 8 months of 2017

Here’s a data-driven look at how these events have shaped the U.S. auto marketover the last decade.

Market shares have been volatile.​ The Great Recession cash crunch knocked automakers, suppliers and their product development programs for a loop. Intensely focused on using cash reserves for survival, automakers slashed product investment, killing some next-generation vehicles and delaying others. General Motors alone sold or killed four brands. The resulting irregular product cadences magnified market share changes.

Nissan North America and Subaru of America have stuck with U.S. growth strategies, and their market shares have grown fairly consistently this decade. After GM’s bankruptcy and brand-shedding, its market share fell 6.8 points from 2007 to the first eight months this year, but only 1 point since 2012 despite the automaker discontinuing the Buick Verano. ​

Others have been up and down. Fiat Chrysler is down a half share point from its 2007 Chrysler LLC starting point but varied from a 2009 low of 8.9 percent to a high of 12.9 percent in 2016. Volkswagen Group of America’s 2017 share of 3.5 percent is up a point and a half from 2007 but down from a 2012 high of 4.2 percent. Toyota Motor Sales is down 2.1 points from 16.2 percent in 2007 but has ranged from 17 percent to 12.9 percent in between.

Smaller automakers are gaining on bigger ones. Over the last decade, the biggest U.S. market share losers are the four best-selling automakers: GM, Ford Motor, Toyota Motor Sales and FCA, down a combined 10.2 points. Four smaller automakers each have gained between 1.5 and 2.8 points: Hyundai-Kia, Nissan North America, Subaru and Volkswagen Group of America.

The winners and losers have notable differences in their North American production bases. Since 2007, the three Detroit-based automakers have cut 17 assembly plants and Toyota has stayed at seven. But the four share gainers have added capacity, including Nissan expanding in Mexico, Subaru in Indiana and VW in Tennessee and Mexico. Hyundai-Kia jumped from one to three assembly plants, adding West Point, Ga., and Nuevo Leon, Mexico.

Keep on truckin’

Car and light-truck split in U.S. sales

8 mos. 2017

2007

Light trucks

63.40%

51.20%

Cars

36.60%

48.80%

Crossovers and SUVs keep hammering cars. Light-truck sales are clobbering cars, especially over the last four years as automakers introduced a spate of roomy new vehicles with command seating positions. Through eight months this year, pickups, vans, SUVs and crossovers captured 63.4 percent of the U.S. market, up from 51.2 percent in 2007.

Essentially, it’s five of eight vehicles sold instead of four. That sounds fast, but it’s been an uneven path. From less than a tenth of U.S. product mix during the 1950s, light trucks first outsold cars in 2002. Cars regained their edge in 2008 as gasoline prices spiked and the economy soured. The lead wobbled back and forth until reaching a 50-50 split in 2013. Since then, the U.S. truck mix has soared every year.

Detroit automakers traditionally have dominated light-truck sales. Their lineups have gotten even truckier since 2007, when the Detroit 3 were the only automakers that sold more trucks than cars. But others are catching up. This decade, automakers Toyota, Nissan, Subaru, Mercedes-Benz, Mazda and Mitsubishi joined the truck-majority club. So far this year, American Honda is selling 50.4 percent sit-highs, too.

How bad is GM’s share loss?​ The headline number for GM’s loss of U.S. market share from 2007 to 2017 to date is 6.8 points. But after its bankruptcy in 2009, the slimmed-down automaker focused on its remaining four core U.S. market brands: Chevrolet, Buick, GMC and Cadillac. In 2007, GM sold 3.8 million vehicles in the U.S., a 23.7 percent share. But strip away the 686,810 vehicles from the soon-to-be-gone Saturn, Pontiac, Saab and Hummer brands, and GM’s 2007 U.S. volume would have been 3.1 million vehicles. That’s a 19.4 percent share, just 2.5 points above the 16.9 percent share so far this year. Another difference from 2007? The new GM is profitable.